Does building homes threaten peace? Or does holding a ceremony honoring as a hero and role model a terrorist who murdered dozens of civilians? Last week, Israel announced it would be doing the former. Palestinians did the latter. The Obama Administration condemned the Israeli words; it ignored the Palestinian deeds.

What could be wrong with building 1,600 homes for Jews in eastern Jerusalem? Nothing, except for Palestinians who do not accept Israel’s existence and intend as a first step towards ending it to set up their own Jew-free state and divide Israel’s capital in the process.

What could be wrong with the Mahmoud Abbas’ Palestinian Authority (PA) publicly honoring Dalal Mughrabi, who led the 1978 coastal road terror attack that killed 37 Israeli civilians? Everything, where peace is concerned but, apparently, nothing where the Obama Administration is concerned.

Visiting Vice-President Joseph Biden condemned the Israeli building project. Secretary of State Hillary Clinton called it “an insult to the United States.” Senior Obama adviser David Axelrod described it as “destructive” and an “affront.” But no such words – in fact, no words at all – issued from this Administration over the PA publicly glorifying Mughrabi, which also occurred during Biden’s visit.

The Obama Administration has noisily opposed Jewish construction in the West Bank and eastern Jerusalem. But last year even it accepted Israel’s unilateral concession (unreciprocated by the PA) of a ten-month building freeze in the West Bank, excluding Jerusalem. Indeed, Secretary of State Hillary Clinton welcomed this concession and called it “unprecedented” – which it was.

After all, throughout the Oslo process, Israel built homes for existing Jewish communities without Palestinians breaking off talks, and little wonder: an Israeli commitment to cease building such homes does not feature in the Oslo agreements. The use of such a pretext for walking out of talks could only have gone so far.

However, last year, the Obama Administration arrived on the scene.

Since loudly demanding a Jewish construction freeze, the only result has been that the PA now refuses to negotiate until Israel accedes to it. This lands an Administration — that has made a priority about restarting peace talks without inquiring into whether Palestinians actually want peace — in a self-made mess.

Having no-where else to turn and unable to acknowledge responsibility for the results of its own posturing, the Obama Administration has scrambled for an alibi to account for its failure by turning on Israel for doing something it had previously accepted.

This fit of pique is likely to be as counter-productive for the Obama Administration as it will be inconsequential for Israel’s Netanyahu government. Israelis do not like other people telling them to divide their capital and they will not turn on the Netanyahu government for opposing steps that could lead to it.

The Obama Administration has already abandoned Obama’s original, sonorously proclaimed goal of swift, direct Israeli-Palestinian peace talks due the very Palestinian refusal to participate which it has incited. Now it may come to witness the disintegration of its painstakingly-orchestrated fall-back, proximity talks – basically the U.S. acting as messenger between the two sides – before they even begin.

Worse, this high-handedness with a friend will ultimately dismay other American allies – as other Obama stunts have done with the Czech Republic, Honduras and Poland, to name a few – while emboldening rivals and enemies.

Obama promised the Czechs and Poles that he would keep faith with his predecessor’s agreement to provide a missile defense shield, before telephoning both countries on the 70th anniversary of World War Two to tell them he had changed his mind at the behest of their worst nightmare, Russia’s Vladimir Putin. Honduras removed from office in accordance with its constitution a lawless president seeking to remain there and was rewarded with U.S. condemnation and the cutting off of military aid. Now Israel announces a housing project that Palestinians don’t like and the Administration reacts with rancorous hyperbole.

Meanwhile, the Administration presses ‘reset’ buttons with Russia, which sells the technology for nuclear weapons development to Iran. It restores an ambassador to Syria, having abandoned holding it accountable for the murder of Lebanon’s Rafik Hariri or dispatching jihadists to kill Americans in Iraq. And Obama personally bows before Saudi and Chinese despots who export the technology and ideology increasingly threatening America and its allies.

The Obama Administration fiddles about Israeli apartments while the Middle East burns.